Académique Documents
Professionnel Documents
Culture Documents
THE FUTURE
ARRIVED
YESTERDAY
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page ii
THE FUTURE
ARRIVED
YESTERDAY
MICHAEL S. MALONE
Malo_9780307406903_5p_00_r2.qxp 3/13/09 8:55 AM Page iv
www.CrownBusiness.com
To purchase a copy of
The Future Arrived
Yesterday
visit one of these online retailers:
Amazon
Barnes & Noble
Borders
IndieBound
Powell’s Books
Random House
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page v
CONTENTS
Acknowledgments vii
Part I
THE NEW WORLD 1
< 1> A New Business Model for a New World 3
Part II
REINVENTING THEMSELVES:
HOW CORPORATIONS EVOLVE 43
< 3> The Rise of the Corporation 45
Part III
BUILDING THE PROTEAN CORPORATION 109
< 6> The Cloud, the Core, and the Boss 111
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page vi
Part IV
RUNNING THE PROTEAN CORPORATION 197
< 11 > Who Matters:
Fateholders 199
Part V
THE PROTEAN SOCIETY 247
< 14 > The World’s First Entrepreneurial Society 249
Notes 281
Index 285
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page vii
vii
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page viii
ACKNOWLEDGMENTS
each of them I’ve been, at various times, a student, partner, and editor . . .
and have learned from them every step of the way.
Finally, as always, I’d like to thank my family for their superhuman pa-
tience in living with a professional writer, who only meets one deadline
to work under the shadow of the next.
viii
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page ix
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xi
INTRODUCTION
Catc hing the Fu tu re, Again
In 1992, not even twenty years ago, venture capitalist Bill Davidow and
I predicted the rise of a new organizational form, what we called—in a
book of the same name—the virtual corporation. It would be an adaptive
organization, driven by technology, global in reach. It would be the
form required of more and more organizations—if they are to compete
effectively, if they are to survive.
When first proposed, our ideas seemed far out, their implementation
something for a future generation. Yet today “virtual corporation” is a
commonplace term, and most of us work in one. The revolutionary no-
tions of 1992—telecommuting, global work teams, technology-based
marketing and sales, and inverted organization charts—are now stan-
dard features of daily working life in much of the world.
The Virtual Corporation was written in anticipation of, but before the ar-
rival of, the Internet Age. Davidow and I could already see that modern
corporations faced a serious challenge, even a threat, if they did not rec-
ognize the profound social and cultural implications of the emerging new
technologies on the way they organized themselves, related to their
customers, communicated internally and externally, and even designed
their products. We also argued that the organizations that intelligently
embraced this change would end up the winners of the new economic
era, and time has proven us correct.
A lot has happened in the last two decades. We now live in the age of
Web 2.0, global wireless, intelligent cell phones, and the pending arrival
of a billion new consumers. And the revolution we predicted in corporate
organization is now largely complete, at least in the developed world.
But technology, and society around it, move on and at an ever faster
xi
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xii
INTRODUCTION
Perhaps it’s because change has been occurring so quickly that it’s
been hard to do anything but react. Or perhaps we’ve been waiting for
a new generation of entrepreneurs and thinkers, men and women who
grew up in the Internet Age, to come up with new solutions. Or perhaps
it’s just been a failure of imagination.
But one thing is certain: while the institutions have, philosophically
at least, stood still, the world around them, and the people within them,
have been transformed in some very important ways. And the fit between
company and people, the employer and the employed, management and
labor—never very good even in the best of times—is becoming less se-
cure with each year. Whenever this has occurred, it has led to friction,
strife, even violence.
We need bold, new ideas. We need new ways of thinking about or-
ganizations that reflect the changing reality of the people who are part
of them. And we need those ideas now.
Thus, the Protean Corporation.
AS WE WILL SEE in the pages that follow, the best companies of the fu-
ture will use the latest information processing, communications, and
xii
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xiii
INTRODUCTION
<> Google has become one of the most successful new companies in
the world by having not one corporate culture, but many under
one roof, each designed for the maximum comfort and
productivity of its people. This in turn has required a radically
new kind of management: the boss as quick-change artist.
<> Wikipedia, a loose confederation of thousands of contributors that
has all but replaced encyclopedias, is one of the most venerable of
publishing industries.
<> Pajamas Media and the Huffington Post, aggregations of indepen-
dent bloggers, is establishing a powerful model of the online
newspaper of the future.
<> Approtech, an “appropriate technology” company that has
transformed the economies of Kenya and Tanzania with foot-
powered water pumps, operates successfully in the gray area
between being a for-profit and non-profit company.
<> Blogosphere legend Evan Williams, founder of Blogger.com,
bought back his podcast company Odeo from its investors, and
transformed it into a successful new company incubator. Its first
spin-off, Twitter, is one of the hottest new companies on the
Web.
<> Giant corporations, from Hewlett-Packard to Intel to IBM, are
becoming such loose confederations of empowered employees
that as many as one-third of their professionals have never met
their own bosses.
<> The U.S. Army, after its experiences in Iraq and Afghanistan,
is hurriedly restructuring itself to be able to change its shape
xiii
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xiv
INTRODUCTION
And there are hundreds more, most of them in the emerging world
of so-called Web 2.0. This shift to protean organizations will have
a profound effect not only on the corporate world, but on society
itself. The transformation has already begun in the United States
where, little noticed by the media, the very personalities that work
best in protean organizations are now being honored, rewarded, and
cultivated.
For example, almost every MBA program in the United States (and
most of the rest of the world) now offers a program in entrepreneurship—
something that was unheard of in their curricula just a decade ago—
meaning that this generation of B-school grads is as likely to be trained
as independent operators as corporate infighters. What Fortune 500
business executive has enjoyed more favorable media coverage than
any other in recent years? Undoubtedly it is Steve Jobs of Apple, who
has led his company through three radical transformations (computers,
consumer electronics, telecom) in a single decade. And the most cele-
brated new CEOs of Gen-Y? The founders of social networks, such as
twenty-three-year-old Mark Zuckerberg of Facebook, who have built
companies composed of small core teams serving tens of millions of users/
co-creators.
Protean organizations, by their very mutability, will also soon begin
to erase the traditionally rigid lines between for-profit and non-profit or-
ganizations, as well as between start-up companies and mature enter-
prises. These boundary lines are so entrenched that distinct cultures
have arisen on opposite sides of these walls, and as those walls crumble,
there are likely to be dislocation and frustration as both sides struggle to
adapt, when non-profits find they have to become more competitive
(and their financials more carefully scrutinized than ever before) and es-
tablished companies find themselves (sometimes to their horror) with
wild-eyed mavericks and renegades in their ranks.
xiv
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xv
INTRODUCTION
TECHNOLOGY
Current semiconductor research and Moore’s Law (the hugely influen-
tial prediction, first made in 1964 and supported by evidence ever since,
that the complexity and power of the computer chip will double every
eighteen to twenty-four months) both suggest that by 2010 we will see
the arrival of low-cost terahertz—1 trillion calculations per second—
microprocessors. By the same token, memory technology will place as
much as 100 terabytes of storage on a single handheld computer disk.
Meanwhile, the capacity to most private homes in the United States
(and most of Europe) of fiber optic cable, i.e., the third generation of the
Internet, will approach one gigabit per second.
Together, this represents a technological leap of almost unimaginable
xv
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xvi
INTRODUCTION
OR GAN I ZATION AL
With implementation, these organizational tools will begin to change
the way companies structure themselves. The current trend toward de-
centralization, de-massification, and the destruction of hierarchies will
not only continue, but accelerate. So will telecommuting, global work-
teams, and real-time enterprise networking.
Even more important, the rate at which companies reorganize them-
selves will also accelerate. Instead of shifting from one form to another
(i.e., product divisions to market sector groups to integrated operations)
xvi
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xvii
INTRODUCTION
HISTORICAL
The history of American business is the story of long periods, a decade
or more, spent consolidating the current and received business model,
punctuated with the sudden appearance of a new, replacement model.
These rapid transformations typically occur in the aftermath of wars or
economic downturns, at the arrival of a new generation, or after pro-
found technological change. The middle years of the next decade are
likely to feature the rare conjunction of all three.
From the Industrial Revolution forward, the trend in business organiza-
tion has been toward increasing independence of employees, ever greater
flexibility of operations, and more pervasive implementation of technol-
ogy. The “virtual” corporation was an outgrowth of the rise of the Internet,
the laptop computer, the cellular phone, and teleconferencing, as well as
the mass customization made possible by the IT revolution. It also lent it-
self neatly to the antitraditional attitudes of Generation X.
xvii
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xviii
INTRODUCTION
Those changes have been assimilated. Now a host of new forces pre-
sents itself. First are the major technological advances in chips, memory,
and bandwidth, whose effects will be amplified by powerful new software
tools in real-time corporate information, multimedia work-sharing, and
employee/customer/supplier relationship management. There are also the
as yet unknown implications of 9/11 and the rise of international terror-
ism, including the greater need for the decentralization of facilities and
a greater dependence on secure networks and the distribution of rec-
ords, decision making, and staff.
Just as important is the ongoing shift away from distinct products and
models to aggregations of capabilities, “smart” products and services,
and true mass customization. The fact that these products and services
will be increasingly Web-enabled will only speed this development.
GENERATIONAL
Finally, there is the rise of a new generation, an event that is often the
catalyst for radical change. The emerging “Gen-Ys” are distinctly differ-
ent from the generations that came before. Not only is it the first gener-
ation to be born in the computer age (today’s grad students were born
the year of the Macintosh introduction), it also combines deep tech lit-
eracy with a skeptical pragmatism about its uses. This is the “fix-it” gen-
eration, the roboteers, who want most of all to make current technology
work right. It is also extremely entrepreneurial.
This cohort, many with parents who have always worked at home,
has little interest in ever taking an office job, or working for a business
that doesn’t change, They will expect their jobs to change as rapidly as
the rest of their lives.
As the following pages will show, the process of combining all of
these will be volatile, and the resulting explosion will force change upon
all of our cultural institutions, starting with the world of business.
So why haven’t you heard about this? Because the emergence of each of
these forces has happened in isolation. In the last few years there have been
a number of stories about the next generation of workers, the broadband
xviii
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xix
INTRODUCTION
xix
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xx
INTRODUCTION
xx
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xxi
INTRODUCTION
xxi
www.CrownBusiness.com
Malo_9780307406903_4p_00_r2.qxp 3/6/09 9:55 AM Page xxii
INTRODUCTION
entrepreneurial. The goal in this section is to show not only how the
Protean Corporation is the natural next step in these stories, but also—
for important reasons—why it isn’t.
The third and most critical part anatomizes the Protean Corporation,
from the boardroom to the most distant sales office. This is not a simple
task, given that there are no examples in the world of a fully mature Pro-
tean Corporation—yet. For that reason, in this section I am very careful
to distinguish between what is based on existing examples and what is
speculation.
Part four looks at how the Protean Corporation is likely to behave,
especially as a competitor, as a financial enterprise, as participant in the
global economy, and as a social force.
Part five will speculate on the impact of numerous Protean Corpora-
tions (embedded into an entrepreneurial society) on the American econ-
omy and culture. If my predictions are correct, the Protean Corporation,
like the centuries-old institutional models before it, will ultimately
transform society, ultimately turning it “Protean” as well.
IF NOTHING ELSE, I hope the reader will take away from this book the
realization that despite the fact that our society has undergone enor-
mous changes over the last twenty years, business—the place where we
spend much of our adult lives, the source of our economic health, and
the wellspring of the many products and services that improve our
lives—has not yet caught up with those changes. Today’s companies no
longer reflect who we are now.
That gap creates enormous vulnerability, and danger. I believe the
reader will finish this book not only understanding that we must address
this problem immediately, but also better equipped with ideas for how
to do so. I hope entrepreneurial readers come away from The Protean Cor-
poration realizing that this gap also presents a historic opportunity and
that they now have the tools to capitalize on that opportunity.
In the end, if this book does no more than provoke a discussion about
new business strategies for a new world, it still will have done its job.
xxii
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 1
PART
I
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 3
CHAPTER
<1>
A NEW BUSINESS
MODEL FOR A
NEW WORLD
IN THE AIR
THIS IS A RADICAL BOOK. It calls for fundamental changes in the or-
ganization of businesses and other institutions in the face of the equally
revolutionary changes in society and commerce, all brought on by the
ever-accelerating pace of technological change.
This is a reactionary book. It calls for the restoration to the center of
3
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 4
T H E F U T U R E A R R I V E D Y E S T E R D AY
our institutions of those structures that preserve and nurture the endur-
ing attributes of human nature and culture.
If this seems a contradiction, then so be it. As this book makes clear, a
basic contradiction will lie at the heart of the most successful corpora-
tions of the future.
This contradiction will create perpetual tension in these organiza-
tions, pulling them in one direction toward disintegration and the other
toward ossification; to centralization and decentralization; to tradition
and perpetual revolution; and to permanence and oblivion. This tension
will need to be constantly monitored, managed, and maintained in equi-
librium, and that will be an immense executive challenge.
But the companies that succeed will enjoy a success that is itself a
kind of contradiction: they will be nimble but substantial, adaptive but
established, long-lived but perpetually young. Most of all, these organi-
zations will be able to adapt and change themselves at lightning
speed—they will be shape-shifters, “Protean Companies”—yet they will
retain at their core something enduring and unchanging. And it is pre-
cisely this last contradiction that will define them and make them formi-
dable adversaries.
Protean Corporations will dominate large segments of the global
economy by mid-century, not just because they will prove highly com-
petitive against existing, traditional national and multinational compa-
nies, but also because they will be the best defense against the rapid
change, the unexpected new competitors, and the economic chaos that
will be unleashed by the next billion consumers emerging from the
developing world.
In other words, Protean Corporations will define and lead the next
great world economic era, not just because they will successfully com-
pete with their traditional competitors, but because they will outsurvive
them. Like better-adapted creatures facing a worldwide environmental
catastrophe, Protean Corporations will survive when their counterparts
cannot.
Needless to say, as the situation becomes more desperate, smart and
increasingly anxious companies will rush to embrace the new scheme just
as innovative and highly competitive new organizational models did in
4
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 5
5
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 6
T H E F U T U R E A R R I V E D Y E S T E R D AY
6
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 7
the dot-com boom. Having read all the right business books, the man-
agers of these hot, young companies took great pains to do all the
things expected of caring bosses: freely handing out stock options, buy-
ing ergonomic chairs, turning their offices into college dorms, paying
for employee junkets, putting espresso machines in the lunchroom. . . .
Unfortunately, they forgot to actually build businesses, create revenues,
and, ultimately, convert that high employee morale into productivity,
profits, and job security.
The story of high technology is filled with companies that offered
their employees all kinds of perquisites, from par courses to day care
centers, from massages to free automobiles. But because those perks were
merely add-ons, untethered to the actual operations of the company,
they were quickly taken away the moment the economy turned down.
Meanwhile, during those same downturns, other companies, many of
them notorious for their lack of employee frills and their no-nonsense
attitude toward the bottom line, were much more successful at staving
off layoffs and saving their employees’ jobs. Ultimately, which is better:
an employee weight room or keeping your job during a recession?
Say what you will about the personalities of Bill Gates, Andy Grove,
Steve Jobs, or Larry Ellison, they have over the last two decades given
tens of thousands of people steady employment, and made more than
a few of those workers very rich—and changed the world for the bet-
ter in the process. Theirs may not be most enlightened management,
but when you think of those thousands of families able to buy homes,
raise children, and escape into early retirement, it would be hard not to
call it humane.
Thus, we have two kinds of corporations likely to be the early adopters
of the Protean model: the enlightened ones, which are wise enough to
recognize the competitive power of inspiring their employees, and the
pragmatic ones, which are shrewd enough to know a new competitive ad-
vantage when they see one, and are willing to do what it takes to obtain it.
These two groups are already beginning to recognize that existing or-
ganizational models are losing their effectiveness in the face of an
emerging (wireless) global Web, a new generation of workers, changing
cultural standards, and an unprecedented and explosive expansion of the
7
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 8
T H E F U T U R E A R R I V E D Y E S T E R D AY
global marketplace. They are also becoming acutely aware of their com-
parative sluggishness and of their growing vulnerability to fast-moving
new competitors who may emerge at any moment from the most unex-
pected sources.
And they are getting scared.
It is from these two types of companies, one attuned to its people, the
other focused on finding an edge, that the first Protean Companies will
emerge. Not because they will embrace a clever new academic theory,
but rather because it is the best path to future success. Most, searching
for a new, long-term organizational strategy, will simply back into this
model, realize that it works, and dive in. For the enlightened companies,
the transition to becoming Protean Corporations will be easy because
they will discover to their surprise that they are almost there anyway.
And the pragmatic companies will get there quickly because their cul-
tures are designed for fast, focused, and opportunistic transformations.
By the same token, at the other end of the business spectrum, new
start-ups are, by their very nature—small, loyal teams surrounded by
layers of contractors, part-timers, and simple hangers-on—already Pro-
tean. Becoming true Protean Corporations will require of them merely
an adjustment in trajectory, not a fundamental reorganization. In fact,
one can make the case that the Protean Corporation is, at least struc-
turally, an entrepreneurial start-up writ large. Thus, for new companies,
becoming Protean may simply mean keeping on doing what they are al-
ready doing.
By comparison, it is the vast majority, the millions of companies in
the middle, that will have the most difficulty responding to the growing
competitive threat created by the changing global marketplace and the
emergence of the first Protean enterprises. For them there will seem to
be every reason not to follow this path. After all, there is the precedent
of past success, the dangers of organizational disruption, current prof-
itability, comfort with the power arrangements of the status quo, nervous
shareholders, a large existing capital investment, and most of all, a fear
of abandoning a proven business to go chasing after opportunities that
may prove to be phantasms.
Indeed, there are a million reasons not to change. And a million
8
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 9
companies will likely do just that. They will stand pat right up to the
moment when their entire business begins to evaporate. Just ask the
newspaper industry. Or the video industry. Or the music industry . . .
<1>
The pace of technological change will continue.
Sometime, perhaps around 2020, Moore’s Law may finally hit some un-
breachable wall put up by the natural world: quantum effects, electron
channeling, and the sheer cost of fabricating nanometer chips. But in a
world of twenty-four-month product generations, that is not our imme-
diate concern. For now, the pace of tech, that metronome of the modern
world, is going to continue along its same exponential path—a trajec-
tory that is now nearly vertical and that will produce mind-boggling
advances in the next decade.
9
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 10
T H E F U T U R E A R R I V E D Y E S T E R D AY
<2>
The number of new consumers in the world is about
to triple, making the world economy structurally
more volatile.
Between now and 2015, thanks to the Internet and cheap mobile phones,
the number of consumers actively participating in the global economy
will jump from one billion to three billion. As Silicon Valley marketing
guru and blogger Tom Hayes has noted, it took twenty thousand years
for the first billion consumers to populate the global economy, twenty
years for the second billion, and probably just five years for the third.
The series of shock waves that will be produced by this consumer
population explosion is hard to imagine: new products, companies, and
fads appearing spontaneously from the most unexpected and exotic
places; hundreds of millions of potential customers with little under-
standing of commercial transactions or business law; and huge new
markets that are unlike any that exist today. Entire new industries will
appear almost overnight, and disappear almost as quickly; companies
will pursue customers in the most inaccessible places using the most
unlikely marketing techniques (working through local chiefs, for exam-
ple) and wealth will shift to those new entrepreneurs and companies
that can adapt to this changed world.
In this world of the Third Billion, no market will be secure and no
company, no matter how well run, will be safe.
<3>
Industrialized nations, but especially the United States,
are becoming more entrepreneurial.
10
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 11
this country may now be considered the first true entrepreneurial soci-
ety in human history.
This shift in attitude brings with it a host of secondary effects, both
good and bad. But one fact is indisputable: an entrepreneurial society,
with its perpetually migrating armies of independent workers, is much
more volatile than its corporate counterparts. And any company that
wants to last long in the face of this change will have to develop strate-
gies to either swim against the current or learn to navigate with it.
<4>
A new generation of young people, with different attitudes
toward institutions and authority, is entering the workforce.
They are members of the so-called Entitlement Generation, the upstarts at the of-
fice who put their feet on their desks, voice their opinions frequently and loudly
at meetings, and always volunteer—nay, expect—to take charge of the most inter-
esting projects. They are smart, brash, even arrogant, and endowed with a com-
manding sense of entitlement.
. . . At the University of South Alabama, psychology professor Joshua Foster
has done a great deal of research using a standardized test called the Narcissis-
tic Personality Inventory (NPI). The NPI asks subjects to rate the accuracy of var-
ious narcissistic statements, such as “I can live my life any way I want to” and “If
I ruled the world, it would be a better place.” Foster has given this personality test
to a range of demographic groups around the world, and no group has scored
higher than the American teenager. Narcissism also appears to be reaching new
highs, even within the Entitlement Generation, among American college students.
. . . All of this would seem to suggest that this generation, which is flooding
into the workplace, will create chaotic, unpleasant, and utterly unproductive
11
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 12
T H E F U T U R E A R R I V E D Y E S T E R D AY
work environments that will drive many a good business directly into the
ground . . . 1
<5>
Companies, by their very nature, want to grow and endure.
Hayes has also predicted that the next quarter-century will see the first
trillion-dollar valuation multinational companies. Incredibly, that actu-
ally now seems reasonable, particularly with the prospect of a global
market with three times as many customers as there are today.
But that prediction also assumes that in this increasingly volatile
global marketplace, characterized by dangerous competitive threats com-
ing out of nowhere, and a restive employee population that resists large
organizations, companies will stay alive long enough to reach that size,
or that they will want to.
12
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 13
<6>
Human nature has not changed.
This is ultimately the most important premise of this book. For all of the
changes wrought by technological innovation, and by the push and pull
of fad and novelty, human beings have not fundamentally changed in
thousands of years. They are still ambitious, charitable, egocentric, so-
cial, violent, and nurturing. And like all living things, people constantly
strive to keep these impulses in equipoise; they work endlessly to create
some kind of productive and healthy equilibrium.
But the world is always changing, not least the world of work. As new
technological innovations—the PC, the Web, cell phones, online com-
munities, smartphones, etc.—come at us at an ever faster rate, distorting
traditions in one direction or another, first industry then society races to
restore its lost equilibrium.
In this light, new organizational models such as the Protean Corpora-
tion can be seen both as a response to the arrival of the latest technolo-
gies and as a “fix” to the unanticipated distortions arising from the
previous organizational schemes.
THOSE ARE THE PREMISES on which this book is based. If you do not
agree with them, you should be highly skeptical of all that follows.
13
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 14
T H E F U T U R E A R R I V E D Y E S T E R D AY
Now we’ll look at the forces that affect these premises. They take two
forms: centrifugal forces, which are pulling enterprises apart, and centripetal
forces, which are drawing them together.
14
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 15
engineers), China and India (more new engineering graduates each year
than the rest of the world combined), and Indonesia.
Conversely, thanks to Moore’s Law, each succeeding generation of
cheaper and more powerful computers, servers, hubs, and routers means
that a growing number of domestic companies in those nations can now
grow and compete on the world stage, forcing their more veteran First
World competitors to set up shop there and compete with them. (The
classic example of this is Intel, which, faced with a devastating threat
in consumer chips from Samsung, has moved a number of its assets and
employees to South Korea.)
Meanwhile, throughout the developing world, in both the teeming
cities and in the villages of the “bush,” cheap cell phones, now number-
ing in the billions, are enabling budding entrepreneurs to use everything
from eBay to illegal Nigerian “419” e-mail scams to reach out to the global
marketplace for very little cost but with the potential for huge returns.
Put all of this together and almost everything in the global market-
place seems to be spinning apart. Established companies are extending
themselves outward over time and geography; ambitious young careerists
are (virtually) abandoning their homes for the world, regional compa-
nies are jumping to the international stage, and entrepreneurship is
spreading like wildfire to the most remote territories.
In the face of this, no enterprise can compete unless it expands
outward—through marketing, distribution, satellite sales and service
offices, and remote research labs—almost boundlessly. And this need
for nearly infinite extension is only going to get worse as the technol-
ogy continues to advance.
And as we’ve already noted, technology isn’t the only centrifugal force
at work on companies today. Culture may be even more important.
In the United States we have one generation, the Baby Boomers, that pi-
oneered the idea of entrepreneurship (or, at least, serial employment) and
telecommuting as a lifestyle; a second, the X-Gen, that has largely lived it
through most of its professional life, and a third, the Y-Gen (or Millennials
or the Entitlement Generation) that was born after the tech revolution, is
as at home in cyberspace as in the natural world, and assumes that it is nor-
mal for one or more parent to regularly work at home or take 5 A.M. phone
15
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 16
T H E F U T U R E A R R I V E D Y E S T E R D AY
calls from Kiev. The first of these generations is likely to stay employed as
long as possible, the second is preparing to take over the reins of corporate
power, and the third (as big as the first) is just now entering the workforce.
In other words, we will very soon have an employment base in the
United States that defines work more as a fluid experience of moving from
job to job, project to project, carrying your 401(k) along with you, oper-
ating out of cubicles, tables at coffee joints, and the den at home, than any
traditional notion of a single job at a large company for thirty years fol-
lowed by a gold watch and a pension. This may seem self-evident to the
reader, but please note that it would not have seemed so as late as 1990,
a measure of how sweeping this cultural transformation has been.
And it has only begun. We Boomers have an unequalled ability to
take care of ourselves under the guise of universal benevolence, so we
can be sure that the next few years will see all sorts of legislation to pro-
tect us from the growing cost of health insurance and our general lack
of pensions and retirement savings accounts. The larger result will be to
further free subsequent generations from the need to attach themselves
to particular careers, companies, and communities. And this will spin
them even further from traditional notions of job, employer, and loyalty.
Finally, there is the matter of demographics, the most centrifugal
force of all.
The media is filled these days with Cassandra-like warnings about the
declining birth rate in Japan, Western Europe, and just about every other
industrialized nation. And even if some of the claims are overstated, there
is still no question that the citizens of the industrialized nations are largely
failing to meet their replacement birthrates and, immigration aside (its
own crisis), they are likely in the next twenty-five years to possess popula-
tions that are both diminishing and growing elderly.
Leaving all other concerns aside, this is not a recipe for business
growth. Once again, technology will likely ride to the rescue, with a
continuous array of new products. But upgrading current customers will
take you only so far; the real opportunity lies with capturing new cus-
tomers and starting them up the curve.
If the industrialized nations don’t have those new consumers—and
it’s likely they won’t, at least not in sufficient numbers—then we do
16
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 17
know where to look. It’s those two billion brand-new consumers emerg-
ing in the developing world right now. Not only are they a sufficient re-
placement for what is being lost in the industrialized nations, but also
this gigantic population may very well represent the greatest new busi-
ness opportunity in human history.
That is, if we can get to them. And it won’t be easy; everything from
religion to topography will get in the way. And that’s why—despite our
linked, virtualized world—companies are still going to have to throw
human bodies at the problem, sending employees to the far corners of
the globe, stationing them in offices in the most obscure places. Further-
more, because the situation on the ground at these outlying locations will
be so alien to anything experienced at headquarters, and because (thanks
to the linked world) events will occur so quickly, those outlying employ-
ees and contractors will need to be empowered to make critical decisions
based on their own judgment, and over time that will make them even
less attached to the company with which they are, ostensibly, employed.
Those are the formidable forces pulling companies apart, atomizing
their traditional operations, and challenging any sense in their employ-
ees of loyalty or identity with the organization.
THE CENTRIPETAL FORCES are the human needs for socialization, com-
mitment to a larger purpose, continuity and constancy, and a sense of
legacy.
You may have already noticed a certain symmetry here. The centri-
fugal forces are mostly external and anonymous, and deal with large,
sweeping global trends. The centripetal forces, appropriately enough as
they draw the members of the organization inward, are mostly personal,
small, and local. And if the centrifugal forces are mostly the product
of larger institutions and functions in society, the centripetal forces deal
with human nature in its most intimate manifestations as personal iden-
tity, small groups, and family.
Organizational transformations, like military academies, tend to fight
the last war and fail to anticipate the unique challenges of the next one;
they solve one set of familiar problems while creating a new set of unex-
pected ones. The rise of virtual corporations over the last fifteen years
17
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 18
T H E F U T U R E A R R I V E D Y E S T E R D AY
18
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 19
companies about whether they were slowly losing the loyalty of these
employees.
Time has smoothed over many of these problems, but it hasn’t really
solved them. In many ways, the situation has only grown worse, and we
have merely grown more inured to it. We now accept the fact that mod-
ern employees are typically less loyal to their employers than their pre-
decessors. We accept that working at home or as a road warrior or as
part of a global virtual work team entails a certain loneliness and de-
tachment, and we assume that it is part of our daily work the same way
our grandparents dealt with un-air-conditioned offices in the summer-
time, and our parents with being anonymous cogs in a great corporate
machine. Many of us also know at least one person who is closer to her
online community—or her fellow avatars on Second Life—than she is
to her actual physical neighbors. And probably every person over forty
reading this book has had the dispiriting experience of realizing that upon
retirement, he or she will only be able to look back on a career spent
hopping between companies that no longer exist, and asking themselves
the devastating question: What was it all for?
Both industry and society continue to experiment with new ways to
deal with this growing sense of estrangement, anomie, and pointlessness;
industry does so in order to reduce turnover and increase productivity,
society to reduce the general level of discontent. But ultimately, it is
hard not to believe that this situation is anything but untenable, in the
same way that the time-motion/Taylorized world of the first third of
the twentieth century and the executive suite/organization man world
of the second third finally had to crack under the weight of their own
internal contradictions.
And if this situation is becoming acute for those workers for whom
the notion of an entrepreneurial lifestyle is at least moderately appeal-
ing, it is becoming truly desperate for those folks for whom stability and
commitment are the defining elements of their character.
Here, as with many things in corporate life, the 80:20 rule obtains. In
every great organizational restructuring, the new architecture is in-
evitability designed to appeal to the needs of 80 percent of the partici-
pants, while the remaining 20 percent are left out. A century ago, the
19
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 20
T H E F U T U R E A R R I V E D Y E S T E R D AY
20
www.CrownBusiness.com
Malo_9780307406903_4p_01_r2.qxp 3/6/09 9:57 AM Page 21
21
www.CrownBusiness.com
Malo_9780307406903_5p_03_r1.qxp 3/13/09 9:00 AM Page 295
295
www.CrownBusiness.com
To purchase a copy of
The Future Arrived
Yesterday
visit one of these online retailers:
Amazon
Barnes & Noble
Borders
IndieBound
Powell’s Books
Random House
www.CrownBusiness.com